08 Apr 2020
Posted in Banking
Lay-offs and pay cuts on the cards for businesses across most industries, says GlobalData
The COVID-19 outbreak, which has resulted in travel restrictions and lockdowns in several countries, has negatively impacted businesses across almost all industries. The economic impact of COVID-19 and uncertainty over when normal operations can resume is weighing heavily on industries. This has resulted in some companies considering lay-offs and others pay cuts, according to GlobalData, a leading data and analytics company.
As tracked by GlobalData’s news database, companies across diverse industries and geographies have already started announcing lay-offs or pay cuts.
The travel & tourism industry is among the worst affected with IndiGo announcing pay cuts for senior employees and Qatar Airways announcing temporary downsizing of its staff at Hamad International Airport by 40%.
Aurojyoti Bose, Lead Analyst at GlobalData, comments: “While travel restrictions and event cancelations are affecting the travel and tourism industry, it is also resulting in a drop in demand for jet fuel, as well as other fuel types, thereby adding to the woes for the oil and gas industry, which is already facing challenges associated with oversupply and declining prices. Furthermore, supply chain disruptions ensued by lockdowns have remained a major concern for several other industries.”
The automotive industry is among the key industries affected by supply chain disruption. The chief executive officer of Fiat Chrysler is taking a 50% pay cut for three months and General Motors Korea announced pay cuts and delayed payments to 20% of its senior management employees. Additionally, Tesla announced it was downsizing its workforce at its Gigafactory 1 by 75%.
COVID-19 concerns are also resulting in lay-offs or pay cuts by companies in retailing, technology and communications, consumer packaged goods, oil and gas, construction, financial services, metals and mining, aerospace and defense, and foodservice, among others.
Other key companies considering lay-offs and pay cuts amid the COVID-19 outbreak include Boeing, General Electric, The Gap Inc., General Motors, Harley-Davidson, HSBC, Noble Energy and Occidental Petroleum, among others.
Bose concludes: “While lay-offs or pay cuts have been dominating headlines, there has also been good news for Domino’s Pizza, Walmart, Amazon and Zoom. These companies have been hiring to cater to the increasing demand during the crisis. Similarly, the chief executive officer of Palo Alto Networks announced that he will forgo salary and committed to no COVID-19 lay-offs.”